Foreign Finance Friday: Kiev Update - UniCredit Ukraine

After a long day here in Kiev full of testing and paperwork and orientation, I have more updates about my internship placement and class schedule for the next 10 weeks.

As I mentioned in my last post, I will be working with UniCredit Bank Ukraine, also known as PJSC Ukrsotsbank (PJS Укрсоцьанк in Ukrainian, PJSC Укрсоцьанк in Russian). The naming of banks and companies in general can be very confusing in Ukraine and Russia (see my previous post about Russian stock companies), so from now on I'll simply refer to the bank as UniCredit Ukraine.

Ukrsotsbank, now part of UniCredit.

UniCredit Ukraine is one of the largest and strongest universal banks in the country, and is part of the larger Italian bank UniCredit. The bank was first started in Ukraine in 1990, and since its inception has been one of the leading financial institutions in Eastern Europe. In early 2008, UniCredit Group acquired roughly 94% of the total share capital and former Ukrsotsbank joined the UniCredit Group of banks, which covers 22 countries in Europe alone, and a total of 49 different nations.

UniCredit Ukraine is one of the few banks in Ukraine that seems to have weathered the 2008-2009 global recession fairly well, probably due in large part to its acquisition by UniCredit, and also thanks to a large amount of government support. While the Ukrainian and American banking systems may seem radically different, the concept of "bailouts" or at the very least overt government support of the banking system is very similar. Boris Tymonkin, head of UniCredit Ukraine, recently stated that Ukraine's banking system "came out of recession with honor," as total external debt has been reduced by almost a half and continues to decline; and the fact that "there were no foreign payment defaults" was significant. However, in 2011 UniCredit had to write down almost all of the goodwill on UniCredit Ukraine, part of the reason why the bank posted significant losses that year.

UniCredit Ukraine (photo Kyiv Post)

Some key financial indices for UniCredit Ukraine, as of 01/01/13 (Q4 2012) with USD approximations:

Loan Portfolio: 23,688 billion UAH ($2,906 billion USD)

Assets - 38,829 bln UAH ($4,763 bln)

Funds of legal entities deposited on thrift and current accounts - 6,725 bln UAH ($823 bln)

Funds of individuals -11,644 bln UAH ($1,428 bln)

Capital - 7,657 billion UAH ($939 bln)

Net profit of the bank - 1,873 million UAH ($230 bln)

I will specifically be working in the Corporate Identity and Communication Department. It's not investment banking (UniCredit doesn't really have any IB offices in Ukraine), so I probably won't learn many hardcore financial valuation or accounting skills, but I was planning on studying those during the summer anyway. I'm very excited though--I think it will be a great opportunity to "officially" start my career in finance, giving me the opportunity to work for a very large and well-known bank, improve my understanding of international finance and business in Ukraine, and sharpen my PR and critical thinking skills--all while improving my professional Russian proficiency. Should make for one awesome summer.